3 Solid Reasons Why Kickstarter Money Is Far Better Than Foundation Grants

Every early entrepreneur dreams of getting funding especially funding free from constraints. Flexibility and freedom to do what it takes to build the startup can be amazingly empowering. With dreams comes some amount of dread in the form of the magical investor and their mysterious ways. New articles are published every day about approaching investors, talking terms and long fund raising cycles. What if I told you there is another way an enchanting path that gets you to your funding dream only on the basis of your idea or product, the demand for it and some creative marketing.

I present Kickstarter and the rise of  crowdfunding. I must admit, until now I never fully understood the power of crowdfunding and how its so much better than traditional funders like Foundations — at least not until I spoke to Meredith of Ricefield Collective.

Meredith recently raised a close to $100k dollars using Kickstarter to set up a social enterprise to help the indigenous people of the Philippines. Her idea was to teach these indigenous folk who have been farming rice terraces for centuries a new skill so they could make additional money and preserve their way of life. She wanted to teach them knitting with the purpose of selling what they made in the western world. To get her idea off the ground she turned to crowdfunding and Kickstarter instead of the traditional route of approaching a Foundation with her proposal. Within a short period of 30 days she raised $73,000. Her initial goal was to raise $24,000 which was met in just 10 days and this led to a new stretch goal of $85,000. I’ve previously written about her Kickstarted campaign.

In an interview with Dutiee, Meredith shared that she consciously opted to raise funds on Kickstarter instead of approaching a Foundation as Kickstarter funds gave her the freedom to grow the company the way she wanted instead of having a large entity like a Foundation oversee them.

The biggest advantage of raising funds on Kickstarter was the unrestricted funds, Meredith Ramirez, Ricefield Collective.


Anyone who has ever been involved in the social good space would understand the importance of unrestricted grants – money with no conditions attached,  money which the organization could deploy any way they wish towards achieving their goal. Before the rise of crowdfunding there was very little unrestricted funds available out there for social entrepreneurs. Most of the philanthropy money comes with lots of conditions attached on how the funds can be used and were rarely for the organization to build their capacity.

To get a foundation grant one needs to submit a very detailed proposal and budget with every expense detailed ahead of time. Any minor changes to the proposal or the budget requires donor approval. The whole process is quite restrictive and doesn’t provide much scope for experimentation. I remember going through this tedious process when raising funds for my previous nonprofit, World Toilet Organization. We needed growth capital and there were just no foundations out there who were ready to give us the grant we needed for hiring the people we required to grow. Luckily we did have one foundation (Rockefeller Foundation) invest in us as they understood the importance of investing in the organization.

Kickstarter and other similar crowdfunding platforms (Indiegogo and Start Some Good) allow you to raise funds with no attached constraints, you have the freedom to decide what’s best for your business. Another major advantage is time, running a crowdfunding campaign is usually the fastest possible way to raise money. While you obviously have to work hard towards fulfill the rewards you promised your backers — you are free to put the money to work the way you think best.

There is a lot of power in unrestricted money specially when you are doing a startup — it give you the breathing room to experiment, to make a few mistakes, to iterate, to do whatever is needed to grow without being answerable at every point like with a traditional funding source. I’ve seen a social startup, Project Repat evolve significantly since their first Kickstarter ask. They’ve raised funds on Kickstarter thrice. There are also a number of other examples of social good ventures who have turned to Kickstarter to fund their growth, Raven + Lily being one of them.

The other visible benefits of raising funds on Kickstarter and similar crowdfunding platforms over seeking philanthropic dollars are:

You can raise good amount of money in a relatively short period of time

Raising philanthropic dollars be it from a Foundation, a corporate or any donor can take anywhere from six months to two years. However crowdfunding campaigns are mostly short duration, time bound. For instance on Kickstarter the duration of fundraising campaigns is for a maximum period of 60 days. During those limited fundraising days one needs to put in a lot of energy and effort to get the word out but it pays off with you raising unrestricted money in a really short period of time.

You build a community of passionate supporters

This is an asset you are going to cherish as you go forward with your idea. When you go the crowdfunding way you build a community of people who are vested in your idea and are there to help and raise support when you need. Also if you are raising funds for a consumer idea your backers are your first set of customers. If you keep them happy and engaged they would turn to be your most passionate advocates and help enlist more support.

If you are eager to understand the world of crowdfunding, I would recommend going through our previous articles below. I’ve also included links to few other relevant posts.

1. Guide To Changing The World With A Kickstarter Launch

2. What Social Good Startups Should Know About Crowd Funding

3. Five Overfunded Social Good Projects on Kickstarter

4. How To Crowdfund $50,000 In Your Spare Time 

Filed under: Funding


Deepa Chaudhary

I have extensively worked at grass-roots from working in the slums of Mumbai to being on the frontline of numerous disaster relief efforts. I'm passionate about social entrepreneurship and I love discovering and writing about new trends in the social good space.